Purchasing your products directly from Chinese factories can often be a good opportunity to save money whilst retaining quality but it can also be intimidating and time consuming.
It is important to be well prepared and to understand the major challenges of sourcing in China.
The following points should be taken into consideration to maximize awareness and efficiency:
1- Find the Right Suppliers
The first step to successfully sourcing in China is to identify appropriate suppliers. There are numerous ways to start this process from online stores such as Alibaba https://www.alibaba.com/ and Madeinchina http://www.made-in-china.com/ to professional exhibitions eg. The Canton Fair https://www.cantonfair.net/
However it is useful to think of these sources as “supplier directories” there is a vast range in terms of quality and professionalism. It is important to evaluate the following metrics
– Price (see point 4 about negotiating)
– Lead Time
– Required Certifications (usually needed for importing goods)
– After Sales Service (do they provide spare parts, can they repair products ? etc.)
– Testimonials (have they already exported, are they working with big companies ?)
Finally (and most crucially) always visit a factory before deciding to work with a supplier to check the conditions.
2- Take ALL the cost into account:
Most companies underestimate the full cost when buying in China and lose money along the way. Before you start make sure you have taken into account all the costs that are added to the suppliers’ prices including (but not limited to): transportation, taxes and duty fees. There may also be additional costs when looking for new suppliers, factory visits and controls and fluctuating exchange rates.
There is a chance that products can be damaged or broken during transit. Zero risk does not exist! Even if your goods are under warranty, depending on the warranty conditions you have agreed on with your supplier, you might have to pay the shipping costs for the spare parts for example. Storage of your goods while you waiting for them to be repaired also have a cost.
3- Communicate with your suppliers
The majority of problems you may encounter whilst purchasing in China can be easily avoided with open, clear communication. It is likely that your counterpart will not be a fluent English speaker and may have a different cultural background. Always make sure your needs have been well understood.
Chinese people often say “yes” to acknowledge that you have been heard, this does not necessarily mean your request has been accepted. Don’t hesitate to repeat and to clearly differentiate between what is ‘important’ and what is ‘compulsory’. Make sure all specific details of the project have been covered
4 – Negotiating
Chinese factories are able to deliver exceptional as well as exceptionally bad quality! If you negotiate for the lowest price suppliers may accept but quality may also be compromised. Quality has a price- in China more than anywhere else!
5 – Control during and after the production
Once the order is passed, don’t assume the job is complete, always keep an eye on production. It can be a bad sign if you don’t receive any updates from your supplier during the production process. Don’t wait until the production deadline to communicate, or you risk delays or even worse parts of your order may be incorrect (size, color, material etc.).
A supplier that feels the customer is regularly communicating and controlling the production will be much more serious and professional. This also applies after production, always check or ask a third party to check your products before shipment. Often Chinese factories require to be fully paid before shipment, if your products are non compliant when they arrive in the warehouse, it will be very difficult to rectify any mistakes.
6- Maintain strong relationships
Don’t rest on your laurels because everything is going well. You can receive 10 perfect orders with no issues and then suddenly receive an order riddled with problems- especially if you are not consistently controlling orders. Chinese companies often have a high turnover of staff, and changes to factory personnel including sales teams are very common. This can impact on the quality of your products and communication.
Always maintain relationships wherever possible, and keep communicating. The majority of Chinese people enjoy doing business with friends. In addition to that business in China revolves around networks. Your suppliers may recommend other factories that they are not in competition with, allowing you to extend your suppliers portfolio.
Vimex is a sourcing office in China, that assisting a variety of clients with different needs to successfully purchase products and services in China. For information contact us !
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Clothilde Deneve is a young professional, working and living in Beijing. She is passionate about Asia and Asian culture. She has been working for Vimex China for 4 years.